Snapchat Goes All In On Local Advertising

Snap Inc., the company behind the popular messaging app Snapchat, has experienced its share of turbulence since going public in March 2017. The company’s journey hit a particularly low point this week when its stock fell below the IPO price of $17 per share.

But if Snap’s recent moves are any indication, the company has a plan to right the ship, and that plan is to go local.

Snapchat, with its growing base of young users, is all about capturing and sharing moments in time. For users, where these moments happen is often just as significant as what they’re doing. Snap seems to understand that premise and the company has made significant efforts to improve location-based features in the app. These efforts, which we’ll take a closer look at, have enhanced the app’s user experience and made Snapchat a more enticing advertising vehicle for local businesses and multi-location brands.

Bulking up local data

In June 2017, Snap added local data aggregator Factual to their list of partners. The move strengthened Snapchat’s stable of location data providers that already included Foursquare and Yext. Adding Factual brings in yet another layer of local data for Snap to leverage. And Factual has a lot of local data, covering more than 100 million local businesses and points of interest in 52 countries.

Introducing Snap Map

In June, Snap made a big splash with Snap Maps, a feature that allows users to see where their friends are and message them directly to make plans to meet up. The map shows hot spots of Snap activity and allows users to explore stories from around the world.


Snap got a lot of help from their friends building the feature. A number of location data and mapping partners chipped in including Mapbox – A Snap partner credited for providing the underlying technology that allowed Snap to customize map layers and update user data in real time. And in May, Snap acquired startup Zenly whose social mapping app seemed to provide the inspiration for Snap Map’s user interface.

Despite the obvious benefits for local advertisers, Snap hasn’t announced plans to serve ads in Snap Maps…yet.

Locking down attribution

Snap has some solid location data and a fancy new map feature to put it to use. But, it’s a publicly traded company that’s never turned a profit with stock price headed in the wrong direction. The company needs revenue. Right now, Snap is Jerry Maguire, its shareholders are Cuba Gooding Jr. and it’s just about time for that phone call.

And in digital marketing, there’s no better way to “show me the money” than offering the ability to tie online exposure to offline sales.

In June (it was a busy month for the company) Snap acquired Placed, a location-based analytics startup that had already proved its offline tracking chops. After partnering with Snap in 2016, Placed was able to measure “the online and offline behavior of nearly 2 million double opt-in users to connect Snapchat users to offline store visits.”

This capability is significant for features like Snap to Store, a tool introduced earlier this year to help advertisers measure Snapchat ads’ ability to drive users to specific locations. To demonstrate how the feature worked, Snap touted a sponsored Geofilter ad for Wendy’s that drove more than 42,000 incremental visits to the chain in one week.

Snap to Store imageVia Snap Inc. S-1 filing

Selling ad space

These moves put the pieces in place to serve ads and track conversions, but Snap wasn’t done. To help make ad purchasing more available and convenient for advertisers, Snap has partnered with a number of ad platforms.

In June (did I mention it was a busy month?), Snap added GroundTruth to their list of partners. GroundTruth has a wealth of location data from 95 million active monthly users and 100 million places and points of interest.

Partnerships like this are significant because they provide advertisers extra incentive to buy ad space on Snapchat. GroundTruth laid out one example of how this impacts Snapchat’s ad offering:

Snapchat allows businesses to target full screen video ads at users. GroundTruth enhances this by allowing advertisers to target unique users based on GroundTruth’s location profiles… By leveraging the power of GroundTruth’s Location Audiences with Snapchat’s Audience Match technology, (targeting specific users) is now possible, and easier than ever.

These types of partnerships should help Snap sell more ads. And, from an advertiser’s prospective, Snapchat has (or is developing) almost every component you could ask for: Engaged user base – check. Sophisticated local targeting – check. Features that encourage users to share their location – check. Ability to track conversions – check.

There are no guarantees, but it sounds like shareholders should hold off on hitting the panic button on Snapchat for now.

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